70 of Solebury financial adviser's clients invested $30M in Ponzi scheme
The Securities and Exchange Commission has sued a Bucks County financial adviser who allegedly convinced customers to invest in what turned out to be a Ponzi scheme.
The complaint, filed in U.S. District Court in Philadelphia, alleges that Emanuel L. Sarris Sr., 71, of Solebury, owner of the Sarris Financial Group Inc., convinced more than 70 people to invest more than $30 million in the Kenzie Funds.
Authorities said the Illinois-based Kenzie Funds were a "massive" scheme that defrauded anyway 400 investors out of more than $105 million between 2001 and 2010. The SEC has already obtained a judgment against Kenzie and its principal, Illinois resident Daniel Spitzer.
According to the complaint, Spitzer and the Kenzie Companies offered foreign currency investments through the Kenzie Funds, and told investors the funds earned steady, positive returns. In reality, Spitzer and the Kenzie Cos. only invested a third of investors' money, the complaint said. The rest was used to pay other investors, as so then as management and incentive fees, sales agents' fees and operating costs, which is how a Ponzi scheme works, authorities said.
Even afterwards raising questions about the fund - and withdrawing $200,000 from his own account there - Sarris continued to encourage customers to invest, the complaint says.